UK - Trade union giant GMB is urging the government to introduce compulsory employer and employee contributions in the Pensions Bill.
The union says compulsion is the only way to secure “decent” benefits in retirement.
General secretary Kevin Curran – speaking at an Institute of Employment Rights conference, which saw the publication of Pension Promises and Employment Rights – said the voluntary approach “simply hasn’t worked”.
Curran said: “There is no point in the government forcing companies to offer a stakeholder pension scheme as the minimum if they are not forced to contribute to it. All this does in reality is offer employees a personal pension which they could quite easily have arranged for themselves.”
Curran said in order to have a “realistic chance” of providing a sustainable level of benefits on retirement, employers should pay contributions of 10% a year while staff paid 5% a year.
“There should be a ratio of at least two-to-one,” he said.
But the department for work and pensions defended the voluntary approach. A spokesman said: “For the voluntary system to work all partners have to play their part: government, employers, trade unions and individuals.”
He added: “We would prefer voluntarism to work, but in terms of compulsion the door is open. On the basis of the Pensions Commission assessment we will decide whether there is a case for moving beyond the current voluntary approach.”
Enhanced powers for The Pensions Regulator (TPR) to prosecute and fine company directors who "wilfully or recklessly" put their defined benefit (DB) pension scheme at risk will be hard to enforce, commentators say.
Melrose has pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the engineering business.
Existing master trusts will be forced to pay £41,000 when applying for authorisation under the upcoming regime, the government has confirmed.
UPDATE 2 - DWP publishes DB white paper: Stronger powers for TPR, DB chair statements to be introduced
The Pensions Regulator (TPR) will be given the power to fine company bosses who deliberately puts their defined benefit (DB) schemes at risk, the government has confirmed.